The opinion of the court was delivered by: B. Lynn Winmill Chief Judge United States District Court
MEMORANDUM DECISION AND ORDER
Plaintiffs Idaho Building and Construction Trades Council, AFL-CIO and the Southwest Idaho Building and Construction Trades Council, AFL-CIO (collectively "Trades Councils") are unincorporated associations comprised of local unions affiliated with the Building and Construction Trades Department, AFL-CIO, which represent building trade workers throughout southern Idaho. Clay Decl. ¶ 2, Dkt. 2-2; Moore Decl.
¶ 2, Dkt. 2-3. They exist for the purpose of advancing the interests of building trade unions and their members, advancing generally the union sector of the construction market, and improving working conditions for workers in the building trades. Clay Decl.
¶ 3, Dkt. 2-2; Moore Decl. ¶ 3, Dkt. 2-3. In this suit against Idaho Attorney General Lawrence G. Wasden, the Trades Councils challenge two recent amendments to Idaho's Right-to-Work Act: the "Open Access to Work Act," codified as Idaho Code §44-2013, and the "Fairness in Contracting Act," codified as Idaho Code §44-2012. The Trades Councils allege that both laws interfere with the rights created by the National Labor Relations Act and are therefore preempted.
Both the Trades Councils and Wasden have filed cross-motions for summary judgment. In addition, Inland Pacific Chapter of Associated Builders and Contractors ("IPC ABC"), a construction industry trade association with members in Idaho, and the National Right to Work Legal Foundation ("NRTW"), a nonprofit organization with a mission of fighting compulsory unionism, have filed amicus briefs in support of the two challenged statutes. For the reasons set forth below, the Court will grant the Trades Councils' Motion for Summary Judgment (Dkt. 31) and deny Wasden's Motion for Summary Judgment (Dkt. 32).
The first statute the Trades Councils challenge, the Open Access to Work Act, applies to public works construction in Idaho. It forbids state agencies and cities, counties, school districts, and other political subdivisions from requiring contractors to pay a specified wage scale or provide specified employee benefits to its employees for work on public works projects in Idaho, except as may be required by federal wage laws applicable to public works projects supported by federal funds. It also prohibits Idaho government agencies from requiring contractors, subcontractors and suppliers to sign collective bargaining or other union agreements as a condition of bidding on or performing contracts for construction of public works projects. The construction industry commonly refers to these types of agreements when used on a particular project as "project labor agreements."
The second statute, the Fairness in Contracting Act, is aimed at "market recovery programs." Unions began adopting market recovery programs, also known as "job targeting programs," in the early 1980s to enable signatory employers to compete for "targeted" jobs. Typically, unions carry out their market recovery programs by selecting projects to target and guaranteeing subsidies to union contractors who submit successful bids. The purpose of the subsidies is to reduce the unionized contractor's labor costs while allowing the union to maintain its collectively-bargained wage scale on the job and secure additional employment opportunities for its members. Clay Decl. ¶ 3, Dkt. 2-2; Moore Decl. ¶ 3, Dkt. 2-3.
All market recovery programs in Idaho are maintained through voluntary contributions, which are deducted from the gross earnings of workers represented by the unions that operate the programs. Clay Decl. ¶ 11, Dkt. 2-2; Moore Decl. ¶ 5, Dkt. 2-3; Oveson Decl. ¶ 3; White Decl. ¶ 3. In some instances, such contributions are paid directly by union members to the union. Moore Decl. ¶¶ 5,6. By allocating the contributions among all members, local building trade unions seek to spread the economic concessions over the entire union membership in an equitable fashion. Id.
The Fairness in Contracting Act prohibits three types of conduct relating to job targeting programs by labor organizations and contractors in the competitive bidding process. Specifically, it prohibits (1) contractors and subcontractors from receiving any wage subsidy, bid supplement or rebate on behalf of its employees or from providing subsidies, bid supplements or rebates to its employees; (2) labor organizations from paying a wage subsidy or rebate to its members in order to subsidize a contractor or subcontractor; and (3) the use of any fund derived from wages collected by or on behalf of labor organizations to subsidize contractors or subcontractors in Idaho. A violation of the Fairness in Contracting Act carries substantial penalties: up to $10,000 for the first offense, $25,000 for the second, and $100,000 per violation for each additional offense. Any interested party, including any bidder, contractor, subcontractor, or taxpayer has standing to challenge any violation of the new act and entitles the challenger to an award of attorney's fees and costs in the event the challenge succeeds.
The Trades Councils argue that both statutes are preempted under the NLRA. In passing the NLRA, Congress largely displaced state regulation of labor relations. Golden State Transit Corp. v. City of Los Angeles ("Golden State II"), 493 U.S. 103, 108 (1989). While the NLRA contains no statutory preemption provision, the Supreme Court has found that Congress implicitly mandated two types of preemption: Garmon preemption and Machinists preemption.
The first, Garmon preemption, precludes several kinds of state intrusions on the NLRA's "integrated scheme of regulation," including "potential conflict of rules of law, of remedy, and of administration." San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236 (1959). Different dangers attend each conflict: (1) "[t]he danger from the first kind of conflict is that the State will require different behavior than that prescribed by the NLRA (the substantive concern)"; (2) "the danger from the second is that the State will provide different consequences for the behavior (the remedial concern)"; and (3) "the danger from the third is that Congress's design to entrust labor questions to an expert tribunal -- the NLRB -- would be defeated by state tribunals exercising jurisdiction over labor questions (the primary jurisdiction concern)." Healthcare Ass'n of New York State, Inc., v. Pataki, 471 F.3d 87, 94-95 (2nd Cir. 2006). To protect against such conflicts, Garmon preemption prohibits states from regulating activity that the NLRA protects, prohibits, or arguably protects or prohibits. Wis. Dep't of Indus., Labor & Human Relations v. Gould, Inc., 475 U.S. 282, 286 (1986).
The purpose of Garmon preemption is to preserve the integrity of the "comprehensive and integrated regulatory framework" Congress established in the NLRA. Garmon, 359 U.S. at 239-40. Under the NLRA, "Congress did not merely lay down a substantive rule of law to be enforced by any tribunal competent to apply law generally to the parties." Garner v. Teamsters, Chauffeurs & Helpers Local Union No. 776, 346 U.S. 485, 490 (1953). Rather, "Congress evidently considered the NLRB, with its centralized administration and specially designed procedures, necessary to obtain uniform application of its substantive rules and to avoid these diversities and conflicts likely to result from a variety of local procedures and attitudes toward labor controversies." Garmon, 359 U.S. at 239-40.
Of course, Garmon preemption does not apply when the activity a state seeks to regulate falls beyond the arguable reach of the NLRA. This, however, does not mean that activities ungoverned by the NLRA can be controlled by the states. More than indicating Congress' desire for centralized administration and uniformity in the application of its provisions, the NLRA reveals that Congress intended certain concerted activities to remain unfettered by any governmental interference, including the NLRB. "Congress formulated a code whereby it outlawed some aspects of labor activities and left others free for the operation of economic forces." Weber v. Anheuser--Busch, Inc., 348 U.S. 468, 480 (1955).
Thus, the Supreme Court recognized a second line of preemption analysis known as Machinist preemption, which forbids both the NLRB and the states from regulating conduct or activities that Congress intended to leave to "the free play of economic forces." Machinists v. Wis. Employment Relations Comm'n, 427 U.S. 132, 140 (1976). Machinists preemption reflects the NLRA's broader purpose of restoring equal bargaining power between labor and management, and it prevents both the states and the NLRB from "picking and choosing which economic devices of labor and management shall be branded as unlawful." Nat'l. Labor Relations Bd. v. Ins. Agents' Internat'l. Union, AFL--CIO, 361 U.S. 477, 498 (1960).
1.Open Access to Work Act
The Trades Councils argue that the Open Access to Work Act is preempted under both Garmon and Machinists. Wasden and amici, however, raise several procedural issues that must be addressed before reaching the merits of the Trades Councils' challenge to the Act.
As a threshold matter, the Court must decide whether Wasden is properly named as a defendant under the Ex Parte Young doctrine. This issue is intertwined with whether the Trades Councils have standing to bring suit against him.
The Eleventh Amendment generally bars the federal courts from entertaining suits brought by a private party against a state or its instrumentality in the absence of state consent. Los Angeles Cty. Bar Ass'n v. Eu, 979 F.2d 697, 704 (9th Cir. 1992). A plaintiff does not avoid this bar by naming an individual state officer as a party in lieu of the state. "Yet, few rules are without exceptions, and the exception to this rule allows suits against state officials for the purpose of enjoining the enforcement of an unconstitutional state statute." Okpalobi v. Foster, 244 F.3d 405, 411 (5th Cir. 2001).
This exception relies on the fiction constructed in Ex parte Young -- that because a sovereign state cannot commit an unconstitutional act, a state official enforcing an unconstitutional act is not acting for the sovereign state and therefore is not protected by the Eleventh Amendment. Ex parte Young, 209 U.S. 123, 155-56) (1908). Ex Parte Young mandates that a party suing a state official in challenge to an allegedly unconstitutional statute may only seek prospective declaratory or injunctive relief, and not relief for past violations. "The rule of Ex Parte Young 'gives life to the Supremacy Clause' by providing a pathway to relief from continuing violations of federal law by a state or its officers." Los Angeles Cty. Bar Ass'n, 979 F.2d at 704.
A plaintiff is not free to randomly select a state official to sue in order to challenge an allegedly unconstitutional statute. Instead, Ex parte Young imposed a second condition on parties bringing such claims: the state officer sued must have "some connection with the enforcement of the allegedly unconstitutional act, or else it is merely making.the state a party." Ex parte Young, 209 U.S. at 155-56 (emphasis added). Moreover, "[t]his connection must be fairly direct; a generalized duty to enforce state law or general supervisory power over the persons responsible for enforcing the challenged provision will not subject an official to suit." Los Angeles Cty. Bar Ass'n, 979 F.2d at 453.
In Planned Parenthood of Idaho, Inc. v. Wasden, the Ninth Circuit addressed whether General Wasden had "some connection" to the enforcement of a parental consent statute for minors' abortions. 376 F.3d 908, 920 (9th Cir. 2004). The statute exposed physicians performing abortions on minor patients to criminal penalties if the physician failed to fulfill certain duties specified in the statute. The Ninth Circuit held that Wasden was a proper defendant because, by law, he could "deputize himself" to enforce the statute in place of the county attorney. Id. at 920. That power gave Wasden the requisite connection between the attorney general's office and enforcement of the statute for standing purposes. Id.
Here, Wasden likewise maintains that he is not a proper defendant under Ex Parte Young because he lacks any connection to the enforcement of the challenged statute. But, he argues, unlike the abortion statute in Planned Parenthood of Idaho, the Open Access to Work Act does not contain a criminal enforcement provision. He contends that the Act only provides a private right of action for any interested party, and Wasden "does not fall within the identified roster of 'interested part[ies],'" as defined in Idaho Code § 44-2013(5). Def.'s Opening Br. at 5, Dkt. 32-1.
The Court is not convinced. The Open Access to Work Act was codified as part of Idaho's Right-to-Work Act, which contains a criminal enforcement provision:
PENALTIES. Any person who directly or indirectly violates any provision of this chapter shall be guilty of a misdemeanor, and upon conviction thereof shall be subject to a fine not exceeding one thousand dollars ($1,000) or imprisonment for a period of not more than ninety (90) days, or both such fine and imprisonment.
I.C. § 44-2007 (emphasis added). The Open Access to Work Act is part of "this chapter" referenced in Section 44-2007. This provision empowers local county prosecutors to initiate criminal proceedings against such violators. Thus, under the plain language of the statute, local county prosecutors may bring criminal charges against violators of the Open Access to Work Act. Because Wasden may "deputize himself" to enforce the statute in place of the county attorney, the connection needed under Ex Parte Young between Wasden and enforcement of the statute exists.
Wasden argues with some force that the criminal liability provision in Section 44-2007 does not apply to violations of the Open Access to Work Act. Rather, says Wasden, the Open Access to Work Act contains a discrete remedial provision that applies exclusively to violators of that statute, and this remedial provision does not contain a criminal enforcement provision. But the language of the criminal liability provision found in Section 44-2007 of the Idaho Right-to-Work is broad enough to encompass violators of the Open Access to Work Act, which is part of that chapter; and nothing in the Open Access to Work Act states that its violators are exempt from this criminal liability provision. Given the plain language of the statute, the Court must conclude that the criminal liability provision applies to the Open Access to Work Act. The question of whether this Court's jurisdiction over Wasden is proper under the doctrine of Ex Parte Young therefore has been answered in the affirmative: "some connection" between Wasden and enforcement of the Open Access to Work Act exists.
This conclusion does not end the inquiry of whether Wasden is a proper defendant, however. This question "is really the common denominator of two separate inquiries," only one of which is whether the Court's jurisdiction over Wasden is proper under the Ex Parte Young doctrine. Planned Parenthood of Idaho, 376 F.3d at 919. There is a second inquiry, which remains unanswered: "whether there is the requisite causal connection between [Wasden's] responsibilities and any injury that the plaintiffs might suffer, such that relief against the defendant would provide redress." Id. This issue is coextensive with the issue of whether the Trades Councils have standing to sue under Article III of the Constitution.
Article III standing "focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated." Flast v. Cohen, 392 U.S. 83, 99 (1968). To establish standing under Article III, the party in question must prove: (1) an injury-in-fact that is concrete and particularized, and actual or imminent; (2) a fairly traceable causal connection between the injury alleged and the conduct in dispute; and (3) a sufficient likelihood that the relief sought will redress the injury. Lujan v. Defenders of Wildlife, 504 U.S. 55 5, 560--61 (1992).
With regard to the injury-in-fact requirement, "[a] plaintiff who challenges a statute must demonstrate a realistic danger of sustaining a direct injury as a result of the statute's operation or enforcement." Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298. Where the plaintiff challenging a regulatory action is "an object of the action (or foregone action) at issue ... there is little question" that the plaintiff has been injured as a result of the government regulation. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560--61 (1992). For example, a party has a standing to challenge a statute that subjects him to a threat of prosecution. Planned Parenthood of Idaho, 376 F.3d at 916-17. Here, however, the Trades Councils do not allege that they have been threatened with prosecution, that a prosecution is likely, or even that prosecution is remotely possible -- because they cannot. The Open Access to Work Act only poses a direct threat to a political subdivision for noncompliance.
But even when a regulation is not directed at a party, it can be "an object" of government regulation so long as the "injury alleged, in addition to being actual and personal," is caused by the challenged action and is "likely to be redressed by a favorable decision." Los Angeles County Bar Ass'n, 979 F.2d at 701 (internal quotation marks omitted). A party seeking to invoke the court's powers must demonstrate that more than "speculative inferences" connect the injury to the challenged action. Id. And even "if causation and redressability depend upon unfettered choices made by independent actors not before the courts," it ...